In this model, we need to adjust the United Technologies income statement for 2014 to show the effect of the sale. Well, the balance sheet has already been deconsolidated. If we have a quick look, we've got the United Group figures here, then we've got Sikorsky on its own. And what we then do is we take from the group figures, we take out the Sikorsky figures, we then make some adjustments such as cash proceeds. Our balance sheet is deconsolidated.

But the income statement still needs to be deconsolidated. So if we scroll down, we get to pretty much the same layout. You've got the United group figures here, so that includes Sikorsky. You then got Sikorsky standalone or make some adjustments to then find United, excluding Sikorsky. Let's take the United old figures. We'll add on those adjustments. We're only gonna do that for the first three cells. Well, the first steps are to de consolidate Sikorsky's figures. So the group figures will no longer include Sikorsky sales depreciation or operating profits. Let's see what happens to the operating margin. If I copy the formula behind that 15% paste it, we find that the margin goes up to 16.6%. So why is this? Well, we can see that Sikorsky a very low margin of 2.9%. Well, not very low figure has been dragging down United's figures to 15%. But if we now get rid of that 2.9%, then that 15% jumps up to its 16.6. So sell a low margin business and the average goes up.

There are some other adjustments we need to make. We've got a gain on disposal net of tax. We've got the figures for that up in the balance sheets. Initially we had a gain on sale of 6,360, that was the sale price minus the shareholders' equity giving us gain of six. We also needed to subtract from that, the tax on that, and that was 2,400. So my gain on sale gives us 3,960. So now interest expense remains unchanged. There was no new debt. There's no repayment of debts. That means interest can stay the same. So my pre-tax profit now is the operating profit last, the gain on sale minus the interest expense for tax. We have to be a little bit careful. Yes, I do want to tax that pre-tax profit of 12,628, but not quite all of it. Some of it, a gain on disposal has already been taxed. It's already net of tax. So I'll subtract that from the 12,628 and the remaining figure I will tax, I'll tax it at the old effective tax rate of 25.5. My new effective tax rate is 17.5%. You might notice that's gone Down quite drastically. However, this figure has been significantly impacted by the very high pre-tax profits, but the very low income tax expense, because the very high pre-tax profit includes the gain on disposal, but the income tax expense does not include gain on disposal. We've actually subtracted it out there. So my net income from continuing operations, pre-tax profit minus tax, gets us 10,419.8. Non-controlling interests is unaffected. There was no IPO. There are no new shareholders, anything like that. So we now get net income to common shareholders of 10,016.8 to find net income to common shareholders before non-recurring items. We take that previous figure and sub tracked off the gain on sale net of tax. Now that's an important figure. That's the figure that we should use when calculating diluted DPS, and that's our next step. Fully diluted WASO has been impacted because the company bought back some shares with the cash proceeds bought back 60 shares.

So fully diluted EPS net income to commiss shares before non-recurring items from, remember, she's that figure divided by WASO gets a 7.11 and that is an accretive deal. If we calculate the accretion comes in at 4.2%. So why have we had accretion? Well, it goes back partly to those margins. Again, we got rid of Sikorsky and it's very low margin. But what did we do with that proceeds? We invested it in buying back very high margin share. Fantastic and excellent use of our cash. So the EPS has gone up. Lastly, let's calculate what's happened to our leverage ratios while net debts. It's going to include our short-term borrows, our long-term currently due, and the long-term debt minus any cash in the company.

And we see that the figure is quite a bit lower than it was previously. If we copy EBITDA and the net debt over EBITDA forms across, we find that our leverage ratio has actually gone down. Net debt to EBITDA has gone down quite a bit. Why is that? We didn't take out any new debts. We didn't pay off any debts. Well, it's the cash proceeds. Well, what's happened is that we've taken the full sale price of 9,083. So cash went up 9,083, but cash only went down by just over 6,000. The difference, the 3000 in the middle, has led to a reduction of net debt. So it was 14,500 ish. It's now down to.